1. Field of the Invention
The present invention generally relates to the elicitation of customer preferences. More particularly, the present invention is related to a method and structure for eliciting true and accurate customer preferences using a web-enabled betting game.
2. Description of the Related Art
The traditional methods used in marketing to elicit customer preferences are surveys, whether on-line or otherwise, conjoint analysis, focus groups, or statistical sales data analysis.
A research team at MIT/UCLA has conducted controlled experiments with students using an on-line double auction procedure to predict customer preferences for new product features (concepts). They compared these predictions to those obtained by traditional methods, such as conjoint analysis, and found consistencies.
Double auction procedures have been tested for other kinds of predictions in corporate interest. For example, Eli Lilly's research division tested such procedures to predict the success of newly developed drugs, where participants were Lilly employees in some trials and external customers in other trials. Hewlett Packard (HP) tested double auction procedures with their executives for revenue forecasting. HP has also used a betting game for revenue forecasting with their executives. However, their bets are not made on a public opinion or preference but on actual sales data. Double auction procedures are also used for the IOWA Election Markets and the Hollywood Exchange Markets.
It is typical that practitioners pay subjects a participation fee to participate in studies employing the traditional methods (i.e., those traditional methods mentioned above) to achieve a desired level of participation. A known difficulty of these methods centers in maintaining participant interest. That is, once the participants appear for study, they typically want it to end as quickly as possible. The participants have no real incentive to provide good quality answers.
In addition to the incentive hazard, all of the participants must be paid to participate. This set a minimum expense on such studies that is a function of how many participants are needed, the inconvenience of traveling to/from or otherwise joining the study, and the expected duration of the study. Typically, the participants are at least aware of the other participants (how many others there are, their attitude toward the proceeding, some non-verbal influences in reaction to inquiries, etc.) Obviously, this awareness can bias responses. While it is possible to mitigate or eliminate these biases and influences through careful isolation of participants, such effort typically entails substantial additional costs.
Last, in such in-person or other study formats, participants are usually willing to devote only so much time and attention questions at hand. Consequently, there is usually a kind of consideration bias. Consider the case where a telemarketer surveys a study participant for their preferences regarding a new model car. The respondent will give typically a quick reaction to preference questions—certainly more impetuous than if they were actually buying the car in question and spending their own money on the features offered. In that survey setting, they typically have no expectation of actually getting the car. They may have an expectation of receiving a gift of some kind—but typically not the product and features that are the subject of the survey.